As deductibles and out-of-pocket expenses rise, so does the pressure for hospitals and other healthcare services to increase price transparency. Over the last five years, we have seen multiple healthcare promotion policy acts introduced in Congress. While no federal bill has been passed mandating transparency beyond that necessitated by the Affordable Care Act, the pressure to become more transparent remains.
Deciding when, if, and how to move toward greater price transparency requires an understanding of how to successfully navigate such a shift.
Marketing Quality of Services
Unlike other marketable goods, it can be difficult for consumers to judge the quality of medical care when price shopping at various healthcare locations. As such, most consumers are led to rely on price as a proxy for quality.
A study conducted by Dr. Judith Hibbard, senior researcher of the Health Policy Research Group at the University of Oregon, showed that many people view cost as an indicator of quality when it comes to medical services. By surveying just over 1,400 consumers, the study found a significant number of respondents opted for more expensive medical facilities in the hope that the service performed there would be of higher quality—even in cases where high-deductible plans would leave them with a greater out of pocket cost. When the same consumers were presented with both cost and quality information for each provider, more made a value-based decision.
So what does this mean for healthcare providers? Hospitals that are shifting to increased price transparency for their services would benefit from marketing the quality of their services. For low-cost institutions, this would help gain consumer trust, generating more business. For higher-cost facilities, being clear about the quality of services can help consumers understand what they are paying for and why it may be worth paying more money.
Transparency Between Physician and Patient
For some physicians, discussing cost with the patient can seem irrelevant when looking at the care given and the improvement in the quality of life. But as more and more families are seeing healthcare rates soar, racking up debt, and struggling to stay on top of medical bills, it is worth considering what is being done and at what cost.
As hospitals and other healthcare organizations take the time to educate their physicians on the cost associated with tests, procedures, medications, and other services, doctors are better able to make value-based recommendations in cases where more than one solution is available. These less costly options will prevent some of the stress that comes when patients begin reviewing treatment costs, and can increase the trust between the physician and patient.
Confirming Coverage Information
Finally, as healthcare providers move forward in price transparency initiatives, it is important to fully integrate and utilize insurance information when estimating cost of treatment. With many consumers struggling to find clear and concise information about their insurance plans, changes are now being made to help turn coverage into something accessible and easy to understand.
Navigating the shift to a more transparent business model can be difficult. However, by using quality to justify cost, educating physicians internally on the price of services, and streamlining the insurance processes, price transparency transitions can be successful.